Good Morning. The pound rose against the Euro due to ongoing problems with Greece's debt situation. The problems in Greece weakened the Euro, and also helped strengthen the US Dollar. So, pound is up against Euro, but down against US Dollar. Rates @ 08;30am are as follows:
- GBP/EUR 1.1400
- GBP/USD 1.5348
- GBP/AUD 1.6508
- GBP/NZD 2.1581
- GBP/CAD 1.5520
- GBP/CHF 1.6341
- GBP/ZAR 11.379
- GBP/JPY 142.25
- EUR/USD 1.3458
Political Situation
Four opinion polls suggested on Tuesday that the surge in support for the smaller Liberal Democrats may be losing momentum, but the party is still keeping the ruling Labour party in third place, pointing towards a hung parliament where no single party will emerge with outright control. This would be bad news for the pound, as a hing parliament would struggle to push through legislation to reduce the deficit. However, Greece's problems stemmed a big fall against the Euro.
Today's Data
Consumer Price Index data for the UK, and this will be watched closely for an idea how inflation in the UK is faring. From the EU, we have Producer Prices for Germany along with the ZEW survey. This is a measure of Economic sentiment, and as such can affect the value of the Euro. A reading above 50 is seen as positive – we expect a reading of 45.2 which is already priced into the market. Also watch for Australia RBA minutes which may provide volatility for AUD.
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